Moderate or sustained oil shock could make Fed more hawkish, BofA says in World Economy News 30/03/2026 A moderate or sustained energy price shock could make the Federal Reserve adopt a policy stance that would be more in favor of potential interest rate hikes, according to analysts at BofA Securities. In a note, the strategists including Aditya Bhave suggested that oil prices, which have been elevated since the outbreak of the war in Iran in late February, are now within a “hawkish” range for the U.S. central bank. Amid hopes for a resolution to the fighting in the Middle East, the U.S. West Texas Intermediate crude contract last fell by 4.1% to $88.57 a barrel by 10:04 ET (14:04 GMT) on Wednesday, while the futures contract expiring in May for — the global benchmark — had slipped by 4.1% to $100.23 a barrel. Rate hikes by the Fed are “most plausible” should WTI average between $80 a barrel to $100 a barrel this year, BofA said. WTI was floating around $65 a barrel prior to the start of the Iran conflict. The uptick in energy prices — sparked in large part by the effective closure of the Strait of Hormuz, a vital waterway south of Iran through which roughly a fifth of the world’s oil flows — has fed concerns around an uptick in inflationary pressures in countries around the world. In the U.S., gasoline-pump prices have already begun to rise, and could factor into overall price gains in the coming months. A recent survey of business activity from S&P Global also found that more American businesses are beginning to grapple with a jump in input costs. “[T]here is a range of outcomes — where the [oil] shock is sustained but moderate — such that the Fed would turn hawkish because it’s more worried about inflation,” the BofA analysts said. “Hikes are far from our base case, but they’re a risk worth considering.” However, the analysts argued, there is a “range” of potential outcomes for the Fed. They added that if the oil shock is temporary and large enough, an initial surge in inflation may soon subside as consumers pull back on spending, weighing on demand. They added that negative wealth effects from a possible equity-market selloff would then exacerbate downside risks to employment, the second pillar of the Fed’s mandate. The central bank would take a more dovish stance in such a circumstance, the analysts suggested. Source: Investing.com 2026-03-30 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share